In pursuit of greater efficiency in the United States health system, public programs and private insurers have begun to pay some hospitals and physicians differently. These new payment models take many forms, but they all impose greater responsibility for cost control and quality improvement on providers and bear some resemblance to failed health care financing arrangements from the 1990s. However, there are some distinctions that could make all the difference.
A recently announced partnership that includes Anthem Blue Cross in California and seven Los Angeles-area hospital systems exemplifies these new models. Some have called “Anthem Blue Cross Vivity” (or just “Vivity”) bold and game-changing. It has characteristics of managed care plans more popular in the 1990s — like health maintenance organizations — as well as those of more modern accountable care organizations, or A.C.O.s. It has been characterized as both. What’s the difference?
As reported by my colleague Reed Abelson, the ambition of the new venture is to provide coordinated, high-quality care normally associated with big-name, integrated systems like Kaiser Permanente, Intermountain Healthcare and Geisinger Health System. Such systems are the inspiration for accountable care organizations, which vary in form but generally contract with Medicare, Medicaid or private insurers to provide integrated care for a large population of patients and can earn bonuses for meeting cost and quality targets or, in some cases, be penalized if they don’t.
Vivity is positioning itself as the antidote to high health-insurance premium growth in California, five times faster than inflation in recent years. It will team up with hospitals and doctors to provide coverage at 10 percent below the typical cost of a large-employer health plan by “aggressively manag[ing] care,” with little to no cost sharing, both characteristics of 1990s-style managed care. Vivity will also operate under a fixed, per-patient budget, called capitation, which was also a characteristic of some 1990s managed care plans.
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Jeffrey R. Ungvary President